North American online shoppers expect free shipping, as well as free returns. And, if a merchant’s return policies are not lenient enough, many will head to another merchant’s site or app.
A majority (51.0%) of U.S. online shoppers and nearly as many Canadians (49.3%) avoid buying from online retailers who do not offer free returns, according to a survey of more than 2,000 consumers in the United States and Canada from omnichannel services vendor Radial Inc.
Consumers are most hesitant to buy clothing and accessories that can’t be easily returned. In the survey, that category was mentioned by 41.4% of U.S. consumers and 50.9% of Canadians. Jewelry and luxury items are second on the list for both sets of respondents as well, with 30.7% of Americans and 32.7% of Canadians opting out of buying such items online. Consumers are less concerned about products such as sporting goods and outdoor equipment (cited by 14.8% of Americans and 22% of Canadians) and health and beauty items (17.9% of Americans and 20.8% of Canadians).
The survey shows important ongoing shifts in consumer attitudes, says Tim Hinckley, chief commercial officer for Radial.
“Approximately 50.0% of North American shoppers look at returns as part of their initial buying decision, and the lack of options in terms of price, convenience and policy will have a direct impact on how a given brand is viewed,” Hinckley says.
That means merchandise returns are an issue CEOs and chief marketing officers—and not just logistics teams—should worry about, he says.
The attention consumers give to retailer return policies could be bad news for the vast majority of top e-retailers that do not offer free returns. Just 111 of the retailers in the Internet Retailer Top 1000 offer free return shipping, according to Internet Retailer’s Top500Guide.com.
To retailers worried that a free-returns policy could hurt their bottom lines, Hinckley says there are ways to make it work.
One strategy is for retailers to only offer free returns to members of their loyalty programs, he says. Such programs might offer a different return experience to customers who only buy discounted or sale items, those with higher return rates may have one return experience—one that might require some form of payment—while others might get a credit immediately, along with free return shipping.
“It is absolutely possible for small e-retailers to offer free returns and make a profit and many are doing a fine job in that area already,” Hinckley says.
The study found another piece of potential good news: Consumers are becoming more flexible with their delivery expectations. The survey found 30.0% of U.S. consumers and 33.0% of Canadians now say delivery time expectations should vary by the type of purchase. That’s up from 17.0% and 20.0%, respectively, in 2017.
Among the other findings:
- Roughly half of all consumers (49.1% of Americans and 50.9% of Canadians) reported that physically shipping their returns was the single greatest challenge when returning online goods.
- The clothing and accessories category leads the product types consumers are most hesitant to buy online in anticipation of returns. Among those surveyed, 41.4% of Americans and 50.9% of Canadians say they will not purchase those items online.
- For both Americans and Canadians, using pre-paid return labels and packaging is the preferred method for returning goods (51% and 39.4%, respectively).
- A quarter of American (24.6%) and Canadian (25.4%) shoppers prefer to manage their returns online and ship items back on their own, while 15.5% of Americans and 20.7% of Canadians prefer to return items at stores.
- 78.0% of U.S. consumers and 67.0% of Canadian consumers have memberships in at least one online marketplace, up from 73.0% and 59.0%, respectively, a year earlier.
A survey conducted in late 2018 by Internet Retailer in partnership with The E-tailing Group and BizRate Insights found room for improvement in the way online retailers handle returns. Though 80.0% of shoppers return 5.0% or less of the products they purchase online, only four in 10 shoppers report being highly satisfied with online retailers’ return policies and their accessibility, the Internet Retailer survey found.